Expansion project $-$ Question $1$: Allied is considering a new expansion project, which is Project S$.$ Project S is a new health food product that Allied is considering introducing to the market. Along the way, Allieds finance staff has received a lot of information, the highlights of which are summarized below. Project S will require Allied to purchase $$1,200,000$ of equipment in $2022($t $=0).$ Inventory will increase by $$175,000$ and accounts payable will rise by $$75,000.$ All other working capital components will stay the same, so the change in net operating working capital $($NOWC$)$ is $$100,000$ at t $=0.$ The project will last for $4$ years. The company forecasts the following sales: $2,720,000$ units in $2023$; $2,640,000$ units in $2024$; $2,515,000$ units in $2025$; and $2,430,000$ units in $2026.$ Each unit will sell for $$2.$ The fixed cost of producing the product is $$2$ million each year, and the variable cost of producing each unit will rise from $$1\mathrm{.}0196$ in $2023,1\mathrm{.}0404$ in $2024,1\mathrm{.}0457$ in $2025,$ to $$1\mathrm{.}1973$ in $2026.$ The estimated tax rate is $25\%.$ The company will use accelerated depreciation that is $100\%$ bonus depreciation. So$,$ the after tax cost of the equipment is $1,200,000*(1-$T$)=900,000($Hint $=$ This is the amount that would be a capital expenditure in year $0,$ depreciation expense in all years would be equal to $0$ as this is a $100\%$ bonus depreciation case$)$ When the project is completed in $2026($t $=4),$ the company expects that it will be able to salvage the equipment for $$50,000$ and that it will fully Recover the NOWC of $$100,000.$Because the equipment will be $100\%$ expensed in $2022,$ the book value of the equipment is zero, so the entire $$50,000$ received in $2026$ is subjected to taxes. Based on the perceived risk, the projects WACC is estimated to be $10\%$a$.$ What is the Cash flow for t $=0$b$.$ What are the cash flows of the remaining yearsc. Draw a timelined. Conduct capital budgeting evaluation of the project feasibilityReplacement Project $-$ Question $2$:Data applicable to both machines:Sales revenues, which would remain constant $ $2,500$Expected life of the new and old machines $4$ yearsWACC for the analysis $10\%$Tax rate $25\%$Data for old machine:Market $($salvage $=$ book$)$ value of the old machine today $ $400$Old labor, materials, and other costs per year $ $1,140$Old machines annual depreciation $ $100$Data for new machine:Cost of new machine $($after $100\%$ bonus depreciation$)$ $ $2,000$New labor, materials, and other costs per year $ $400$

a$.$ What are the incremental cash flows

b$.$ Conduct capital budgeting evaluation of the project feasibility.

Note: Do the both questions on excel sheet.